I Made an Offer on a Home, but I've Changed my Mind!
You find a beautiful house that you feel is perfect and fits your family well. You make an offer and the seller accepts it. What better time to celebrate right? Well what happens if for some reason you decide to back out of the offer. Find out a buyer’s options below in the circumstance where they change their mind or feel they have made a mistake.
Can a buyer change their mind?
In short, yes a buyer can change their mind on an offer to purchase a home. However, it is not always as easy as just telling the seller you are no longer interested. A purchase agreement is a legal document that is important to create and/or cancel with the help of a real estate attorney.
Depending on what stage of the agreement you are in, there are some important steps to take to cancel it. A change of heart in real estate agreements can happen to anyone whether they are first-time home buyers or veterans in the housing market. It is not uncommon.
How long do they have to do so?
If an offer has been made but the two parties have not yet signed the agreement, often known as the negotiating period, than a buyer may back out at any time with no penalties. However once signatures have been made by both parties, the contingency period has begun.
In this period, to get your earnest money back, the cancellation must be based on a contingency that hasn’t been met. There can also be time limits to these contingencies. If the buyer backs out past those time periods, they are known as being in default of the contract.
What steps does a buyer take if they find themselves in this position?
During the negotiation period a simple exchange of communication between realtors or attorneys can cancel the contract. During the contingency period a buyer’s attorney must construct a specific document to cancel agreement, both parties must sign this.
The buyer’s attorney will look into any home buyer contingencies not met that will allow a cancellation of the contract. Examples of this would be contingencies based on whether or not the buyer was able to sell their old home, financing, and liens.
What are the ramifications, if any?
If a buyer can cancel the agreement based on unmet contingencies than in most cases there are no ramifications. If there are no contingencies and the buyer is in default of the contract then earnest money can be lost and sometimes a seller may ask for any profit losses they missed out on selling their home at a later date.
The worst case scenario would be that the seller sues the buyer. This rarely happens but is why it is always best to hire a reputable real estate attorney to help you in the purchase of a home.
Buying a home is a very important decision and it takes time to find the right house. If you end up in a purchase agreement of a home and you feel that you may have made a mistake, step back and think it through clearly. Talk with your family and real estate attorney and get their feedback as well. A good decision is one made with care!
- My Offer Was Accepted; How Can I Back Out? – Bankrate.com
- What Happens After the Seller Accepts My Offer – Andrew Fortune
- Real Estate Contingencies You Should Include in a Purchase Offer – Kyle Hiscock
- Ask the Expert (Bill Gassett): 5 Tips for First Time Home Buyers – mortgages.com
- 14 Articles All First-Time Home Buyers Need to Read – Ferris Property Group
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